National Lottery operator Camelot's half-year profits have plummeted because of falling ticket sales, the company revealed on Tuesday.

The firm's pre-tax profits for the 26-week period up to 30 September were £22.9m, down 27.3% on the same period last year.

The fall in profits largely reflects lower sales of Lottery tickets

Camelot spokeswoman

Over all sales for the National Lottery fell by 5.4% to £2.4bn, the vast majority of which was made up of ticket sales - down 6.9% to £2.1bn.

But sales of National Lottery scratch-cards increased over the half-year period, up 6.8% to £290m.

The amount given to good causes over the period was £668m, taking the total figure given to good causes since the National Lottery was launched in November 1994 to more than £10.5bn.

Camelot says it is on course to hand over £11bn to the National Lottery Distribution Fund by the time its interim licence runs out at the end
of January next year.

'Turbulent period'

Sir George Russell, chairman of Camelot Group, said in a statement: "As Camelot moves towards the beginning of the second licence, the business is recovering from the turbulent period which only ended in January this year".

Camelot claims the hiatus between making its bid for the new licence and the uncertainty before its acceptance by the Lottery Commission last year contributed to its woes.

"We didn't know whether we would have a second licence. Recruitment was put on hold and we couldn't launch any new games during the time that we didn't know.

"But we do expect to recover the decline in sales."

The interim results showed Camelot's profits after tax were £15.8m

Dividends to shareholders were £73.3m, which includes £57.5m of previously reported retained profits.

Investment

Camelot said it had already begun its investment for the second licence period which begins on 27 January next year.

This includes 300 new staff to either replace employees who left during the uncertainty of the bidding process, or to help develop new interactive ways of playing the Lottery such as via the internet and digital television.

The company has also replaced 17,000 of the 25,000 terminals it was required to do before the start of the new licence.

In addition, Camelot has invested in a larger in-house sales force to help retailers maximise ticket sales, new software, and the launch of the new Christmas Millionaire Maker game.